• Latest
Influencer Insights: An Interview with Fraudblock

Influencer Insights: An Interview with Fraudblock

January 9, 2020
Moving identity authentication earlier in customer flow is top of mind at MRC Vegas 2023:

Moving identity authentication earlier in customer flow is top of mind at MRC Vegas 2023:

March 28, 2023
How to Strengthen Your Small Business’s Defenses Against Identity Theft

How to Strengthen Your Small Business’s Defenses Against Identity Theft

March 23, 2023
How Companies Can Avoid Zero-Party Data Fraud

How Companies Can Avoid Zero-Party Data Fraud

March 13, 2023
New Podcast Episode: Walls of Thieving Cellphones with Nethone

New Podcast: How to Stop Return Policy Abuse Fraud (Pt. 2)

February 22, 2023
Germany’s Fraud Prevention Firm Hawk AI to Focus on Global Expansion with $17M Series B

Germany’s Fraud Prevention Firm Hawk AI to Focus on Global Expansion with $17M Series B

February 15, 2023
Merchant Fraud Journal Releases Biggest Annual Fraud Trends Report Yet with Insights from 16 Leading Payment and Fraud Solutions

Merchant Fraud Journal Releases Biggest Annual Fraud Trends Report Yet with Insights from 16 Leading Payment and Fraud Solutions

February 7, 2023
Curbing emerging fraud types with network intelligence and data enrichment

Curbing emerging fraud types with network intelligence and data enrichment

January 31, 2023
Policy Abuse Fraud: What Is It and How to Protect Against It

nSure.ai Delivers Growth to Digital Commerce Leaders and Boosts YoY Revenue by 280%

January 25, 2023
Fraugster and Refurbed partner to increase approval rates and reduce fraud for refurbished electronics marketplace

Sift Appoints Former Ping Identity COO Kris Nagel as CEO

January 20, 2023
Veridos Announces Innovatrics as Strategic Partner for Advanced DNA ID Verification

Veridos Announces Innovatrics as Strategic Partner for Advanced DNA ID Verification

January 19, 2023
New Podcast Episode: Walls of Thieving Cellphones with Nethone

New Podcast: How to Stop Return Policy Abuse Fraud

January 10, 2023
How to Write a Strong Chargeback Policy: Tips to Help You Protect Your Business

How to Write a Strong Chargeback Policy: Tips to Help You Protect Your Business

January 6, 2023
  • Contribute
  • Contact Us
  • About
  • Join Us
  • Advertise
Wednesday, March 29, 2023
Merchant Fraud Journal
  • Home
  • Articles
    • Chargebacks
    • Fraud Prevention
    • Influencer Insights
  • Resources
    • Recorded Webinars
    • Podcasts
    • Vendor Directory
    • eCommerce Fraud Reports
    • Training and Certifications
    • Jobs Board
    • Associations and Non-Profits
  • News
No Result
View All Result
  • Home
  • Articles
    • Chargebacks
    • Fraud Prevention
    • Influencer Insights
  • Resources
    • Recorded Webinars
    • Podcasts
    • Vendor Directory
    • eCommerce Fraud Reports
    • Training and Certifications
    • Jobs Board
    • Associations and Non-Profits
  • News
No Result
View All Result
Merchant Fraud Journal
No Result
View All Result

Influencer Insights: An Interview with Fraudblock

by Bradley
January 9, 2020
in Articles, Influencer Insights
Influencer Insights: An Interview with Fraudblock

Fraudblock is a Shopify eCommerce fraud prevention app that automatically cancels high-risk orders. We sat down with owner and CEO Nick Fischer to discuss a number of unique topics for Shopify merchants to consider including how merchants can accidentally fill known fraudulent orders, the relationship between inventory and fraud, and more.

1. Many merchants starting out on Shopify are new sellers who get caught off-guard by fraud. What are some of the most common mistakes you see these merchants making? Are there any ‘quick win’ changes they can make to make a dent in the problem right away?

Absolutely, I see this all the time, unfortunately – and it’s understandable: Merchants spend a lot of time making their store look great, curating or even manufacturing awesome products, and generating buzz for their launch – fraud is probably not something that even enters their mind during this phase, but it’s an unfortunate reality of the eCommerce landscape and sellers should be prepared to deal with it.

Some “quick wins” that I always recommend to merchants who are just starting out is to make use of Shopify’s built-in protection mechanisms, which are often turned off by default: In your Shopify backend, go into your payment provider settings and make sure that “CVV verification” and “ZIP verification” is turned on.

This will match the customer’s billing address ZIP code to the ZIP that’s linked to their credit card, which already takes care of a surprising percentage of fraudulent order attempts.

2. What do you find are the most important things for merchants to keep in mind to prevent eCommerce fraud when selling on Shopify?

One thing to note is that fraudsters are often willing to do anything it takes to trick you – unsuspecting merchants see the “high risk” warning from Shopify and their first impulse is often to reach out to the customer to ask for additional verification, like a copy of an utility bill or a driver’s license. The problem here is that these can easily be forged, as well, even with just basic Photoshop skills.

What I’ve found is that the best course of action almost always is to simply cancel the order and move on – spending an excess amount of time on a potentially fraudulent order doesn’t actually provide any certainty that the order is legitimate and more often than not will lead to an additional chargeback fee.

This is why FraudBlock automatically cancels, refunds, and restocks orders that Shopify has deemed to be “high risk”, thus avoiding potential chargeback fees and the hassle of manually dealing with the fraudsters.

3. One interesting feature of FraudBlock is that it ‘saves you from accidentally fulfilling fraudulent orders’. I think a lot of merchants would be surprised to hear that’s even possible. How does something like that happen?

Shopify marks “high risk” orders in red within the merchant’s order backend. If you’re dealing with lots of orders (and are thus batch-printing shipping labels and pick lists) or if you’ve got automation flows set up, you may never spot the “fraud” classification.

For example, some dropshipping merchants automatically route new orders to their fulfillment provider, and some merchants offering custom printed products like t-shirts or mugs auto-push their incoming orders to a third-party print shop – these automation flows are great for legitimate orders, but can let fraudulent orders slip through the cracks.

FraudBlock automatically cancels incoming fraudulent orders immediately, which stops all further manual or automatic processing steps in their tracks.

4. You write that FraudBlock reviews orders ‘based on Shopify’s fraud analysis’. What are some of the factors or indicators you take into consideration?

FraudBlock relies on Shopify’s excellent risk classification system to do the heavy lifting. It considers factors such as the CVV, how many payment attempts there were (multiple card declines, for example), the distance between the user’s current location (based on their IP address) to the shipping address, whether the billing address country matches the user’s current location, and other tell-tale signs of fraud relating to the IP address of the user (such as using a web proxy or a VPN connection).

5. At the same time, FraudBlock is an add-on to Shopify’s existing anti-fraud mechanisms. Where do you think Shopify’s native capabilities fall short?

Shopify’s native fraud analysis is actually very good – they see millions of orders across their entire ecosystem every day, and can use this vast amount of data to spot fraudsters before they even land on your store. This gives Shopify an edge over self-hosted solutions like WooCommerce, where every store is its own little island.

However, while Shopify is great at spotting fraud, they just alert the merchant and don’t actually act on their determination, so you still need to manually comb through orders to spot and cancel fraudulent ones.

6. How does FraudBlock work to strike a balance between chargeback prevention and preventing false positive declines on Shopify?

That’s a great question! Shopify actually has multiple risk categories: low risk, medium risk, and high risk. Medium risk orders are ones that are relatively easy to investigate manually – usually, they’re genuine orders, where the customer simply made a typo in their billing details, for example.

If Shopify classifies an order as “high risk”, it’s because they’ve spotted a definite sign of fraud. FraudBlock only cancels “high risk” orders, not medium risk ones. That way, we’re able to reduce the number of chargebacks, while keeping the rate of false positive declines low.

7. FraudBlock automatically deals with inventory issues stemming from fraud. Can you take us through the relationship between inventory and fraud? What problems will merchants run into if they neglect this aspect of fraud prevention?

This is definitely an issue that is often overlooked, because on the surface, you wouldn’t immediately connect fraud with inventory issues. When a customer places an order, Shopify (like most eCommerce platforms) removes the ordered items from your available stock (because you can obviously only ship the same item once).

In the case of fraudulent orders, this means that the items ordered by the scammer can often be stuck in limbo for days or weeks while you’re dealing with the fraudster, potentially preventing legitimate customers from ordering this item (if you’re low on stock or sell unique items).

By automatically restocking the ordered items when cancelling a fraudulent order, FraudBlock immediately allows other, legitimate customers to order the item again – without the merchant’s intervention.

8. Moving on to payments, FraudBlock will automatically void or refund a customer’s payment. What happens when merchants forget to void payments after cancelling an order?

This is actually the biggest issue with fraudulent orders – simply doing nothing (or waiting for the fraudster to provide additional evidence that they’re legit) can actually bite you: If you wait too long after receiving a potentially fraudulent order, the real owner of the credit card will usually spot the charge on their credit card statement, contact their credit card provider, and file a chargeback, meaning that you’ll not only be out of the money that the fraudster paid to you, but also usually have to eat chargeback fees, adding insult to injury!

And it’s not just the fee itself – each chargeback negatively impacts your “standing” with your payments provider, and if a merchant receives a lot of chargebacks, the provider might actually kick them off their platform. That’s why FraudBlock automatically voids or refunds a payment once a fraudulent order comes in, which nips any potential chargeback issues in the bud.

9. If you could give any one piece of advice to Shopify merchants regarding fraud, what would it be?

All too often, I see merchants who are goaded into spending an excess amount of time investigating high risk orders – fraudsters often place large orders, so it’s understandable that merchants want the order to be real, but this can sometimes lead them to throwing caution into the wind.

Especially if you receive a large number of orders, my advice would be to act swiftly and decisively in the face of suspected fraud. Usually, it’s not worth it to manually follow up with the customer to try to verify the legitimacy of the order – simply cancel the order and move on.

Tags: E-commerce false declinesShopify fraud prevention
ShareTweetShareSend
Previous Post

Mimecast Acquires Segasec

Next Post

Influencer Insights: Can Dynamic Card Verification Values Stop CNP Fraud?

Next Post
Influencer Insights: An Interview with ClearSale

Influencer Insights: Can Dynamic Card Verification Values Stop CNP Fraud?

Our Latest Reports

2022 Chargeback Consumer Survey Report

Fraud Prevention Tactics that Enable Exceptional Customer Experience

Addressing Payment Fraud and The Customer Experience in 2022

2022 Fraud Trends Report

ATO Fraud In Retail Report

2022 Customer Experience Report

3 Ways a Unified Chargeback Management and Fraud Platform Increases Revenue

Digital Trust And Safety Report: Combating the Evolving Complexities of Payment Fraud

On-Demand Webinars

Balancing Customer Experience and Fraud Prevention: What’s the Secret?

Stopping Fraud Across the Customer Lifecycle

Addressing Payment Fraud and the Customer Experience in 2022

 

Get the 2023 Fraud Trends Report

Search Our Site

No Result
View All Result

Our Sponsors

Featured Directory Listings

  • logo
    NoFraud
  • SEON. Fraud Fighters
  • sift logo
    Sift
  • Signifyd
  • Ekata
  • Microsoft Dynamics 365 Fraud Protection
  • PayRetailers
  • Spotrisk

Our Sponsors

Fraud Industry News

Moving identity authentication earlier in customer flow is top of mind at MRC Vegas 2023:

Moving identity authentication earlier in customer flow is top of mind at MRC Vegas 2023:

March 28, 2023
How to Strengthen Your Small Business’s Defenses Against Identity Theft

How to Strengthen Your Small Business’s Defenses Against Identity Theft

March 23, 2023
How Companies Can Avoid Zero-Party Data Fraud

How Companies Can Avoid Zero-Party Data Fraud

March 13, 2023

Connect With Us

Quick Navigation

  • Home
  • News
  • Join Us
  • About Us
  • Contact Us
  • Advertise
  • Contribute
  • Privacy Policy

The Payments Media Network

Merchant Fraud Journal
Payments Review

Privacy Policy

Our Privacy Policy
Our Terms of Use

Resources

  • Articles
  • eCommerce Fraud Reports
  • eCommerce Fraud Webinars
  • Training and Certifications
  • Jobs Board
  • Associations and Non-Profits
  • Podcasts
  • Vendor Directory

Popular Posts

  • How to File a Claim With FedEx + What To Do If Claim is Denied

    How to File a Claim With FedEx + What To Do If Claim is Denied

    0 shares
    Share 0 Tweet 0
  • How Does Two-Factor Authentication (2FA) Work?

    0 shares
    Share 0 Tweet 0
  • Top eCommerce Fraud Prevention Companies

    0 shares
    Share 0 Tweet 0
  • The Best Reverse Email Lookup Tools in 2022 (with pricing)

    0 shares
    Share 0 Tweet 0

Featured Vendors

  • NoFraud
  • SEON. Fraud Fighters
  • Sift
  • Signifyd
  • Ekata
  • Microsoft Dynamics 365 Fraud Protection
  • PayRetailers
  • Spotrisk

Download the 2023 Fraud Trends Report

No Result
View All Result
  • About Merchant Fraud Journal
    • Interested in Contributing or Guest Posting to Merchant Fraud Journal?
  • Advertise on Merchant Fraud Journal
  • Articles
    • Chargebacks
    • Fraud Prevention
    • Influencer Insights
  • Contact Us
  • Download Addressing Payment Fraud and Customer Experience Report
  • Download Chargebacks Consumer Survey Report 2022
  • Download Evolving Complexities of Payment Fraud Report
  • Download Fraud Prevention Tactics that Enable Exceptional Customer Experiences Report
  • Download Merchant Fraud Journal 2023 Fraud Trends Report
  • Download the 2020 Chargeback and Representment Report
  • Download the 2020 Merchant Fraud Journal Vendor Guide
  • Download the 2021 Fraud Trends Report
  • Download the 2022 Fraud Trends Report
  • Download the 3 Ways a Unified Chargeback Management and Fraud Platform Increases Revenue Report
  • Download the MFJ 2022 Customer Experience Report
  • Download the MFJ ATO in Retail Report
  • Home
  • Job Dashboard
  • Join The Merchant Fraud Journal Community
  • Merchant Fraud Journal Advertising Agreement
  • MFJ Fraud Trends Report Giveaway
  • News
  • Post a Job
  • Privacy Policy
  • Resources
    • 2020 Chargeback Representment Guide for Merchants
    • 2020 Vendor Guide
    • 3 Ways a Unified Chargeback Management and Fraud Platform Increases Revenue
    • Addressing Payment Fraud and the Customer Experience in 2022
    • Associations and Non-Profits
    • ATO Fraud In Retail Report
    • Balancing Customer Experience and Fraud Prevention: What’s the Secret?
    • Chargebacks Consumer Survey Report 2022
    • Digital Trust & Safety: Combating the Evolving Complexities of Payment Fraud
    • eCommerce Fraud Reports
    • eCommerce Fraud Webinars
    • Fraud Prevention Tactics that Enable Exceptional Customer Experiences
    • Fraud Prevention Training and Certifications
    • How to Build a Recession Proof Chargeback Prevention Strategy
    • How to Stop Fraud During the 2022 Holiday Season
    • Jobs Board
    • Merchant Fraud Journal 2023 Fraud Trends Report
    • Merchant Fraud Journal’s Fraud Trends 2020 Report
    • Merchant Fraud Journal’s Fraud Trends 2021 Report
    • Merchant Fraud Journal’s Fraud Trends 2022 Report
    • MFJ’s 2022 Customer Experience Report
    • Podcasts
    • Prevent High-Velocity Fraud Attacks During the 2021 Holiday Season
    • Stopping Fraud Across the Customer Lifecycle
    • Vendor Directory
    • Webinar – Addressing Payment Fraud and the Customer Experience in 2022
    • Webinar – Mitigating Fraud and Risk on the ACH Network
    • Win January Chargeback Disputes
  • Subscribed
  • Terms and Conditions

© 2021 Payments Media Solutions Canada Inc.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?